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Sen. Elizabeth Warren proposes universal child care, paid for by tax on ultra-millionaires

Presidential candidate Sen. Elizabeth Warren (D-Mass.) is proposing a new national child-care program. (Charlie Neibergall/AP)

Sen. Elizabeth Warren (D-Mass.) released a plan Tuesday for creating a “universal child care” system in the United States paid for by a tax on the very wealthy, pushing the issue of rising child-care costs to the forefront of a wide-open Democratic presidential primary.

The plan proposed by Warren, a candidate for the Democratic presidential nomination in 2020, would ensure that every American would be able to enroll children up to 5 years old in a child-care program while paying no more than 7 percent of their income in fees. Families below a certain income level — $50,000 a year in today’s dollars, for a family of four — could use the facilities free of charge, while everyone above that income threshold would pay a fee of between 0 percent and 7 percent of their income.

The program would cost $70 billion a year, or about $700 billion over 10 years, according to an analysis provided to Warren’s office by economists Mark Zandi and Sophia Koropeckyj at Moody’s Analytics. For comparison, that is about the same cost as Sen. Bernie Sanders’s (I-Vt.) plan to make tuition free at public colleges and universities.

“In the wealthiest nation in the history of the world, high-quality child care should be a right for all of our children and not just a privilege that only the wealthiest families can afford,” said Warren, who is vying for the 2020 Democratic presidential nomination, in a statement.

Average annual child care costs have risen to between $8,000 and $11,000, or at nearly double the pace of overall inflation, said Elise Gould, economist at the Economic Policy Institute, a left-leaning think tank. But some critics on the right argued that Warren’s plan would exacerbate already rising costs and represent an enormous government intrusion in private life in America, while some on the left argue that it does not go far enough.

Others note that the plan may engender a backlash from social conservatives, noting that the details of “national standards” for Warren’s plan remain vague.

“The big thing people are going to worry about is that people don’t like formal child care as the only option,” said Joshua McCabe, a professor at Endicott College who studies poverty issues, noting a plan to expand child care in the 1980s was derailed over similar concerns. “If you give money just to people who use formal care, you anger social conservatives and can anger moderate Democrats — their idea is that you’re devaluing stay-at-home parents.”

Under the plan, the federal government would approve and fund plans submitted by the states to set up local child-care networks. If the states refuse to implement the plan, as many Republican-led states did with parts of the Affordable Care Act, the federal government could work with cities, school districts or local nonprofit groups.

Warren is proposing to pay for the program with her “Ultra-Millionaire Tax” on wealthy households, released earlier this year, that would levy a 2 percent tax on wealth above $50 million, as well as a 3 percent tax on wealth above $1 billion. Warren’s wealth tax is projected to raise about $2.75 trillion over 10 years.

Warren’s plan would more than double the number of children who can receive child care, from 6.8 million today to 12 million under the plan, according to Moody’s Analytics. The plan would also create “high-quality standards” for the child-care program based on existing programs for U.S. military families and Head Start programs.

Samuel Hammond, a poverty expert at the libertarian-leaning Niskanen Center, pointed to studies he said found detrimental cognitive outcomes resulting from a universal child-care program adopted by Quebec in 2000.

“A large pool of high-quality day cares can’t simply be mandated into existence, nor substitute for the kind of care provided by a loving family,” Hammond said. “Making public day-care centers free or artificially cheap would represent social engineering on a massive scale.”

Matt Bruenig, founder of the left-wing think tank the People’s Policy Project, said Warren’s plan is “a good start” but that Democrats should push to provide child care the same way America already provides public education from kindergarten through high school.

Warren’s plan is the first since the 1970s to aim to achieve universal child care, said Katie Hamm, vice president of early childhood policy at the Center for American Progress Action Fund, a center-left think tank, although Sen. Patty Murray (D-Wash.) has introduced legislation that would give child-care benefits to everyone with under $100,000 a year in annual income.

“Right now, quality child care is very difficult to find and really difficult to afford — and research shows that’s stunting economic growth,” Hamm said. “It’s good to see child care getting this much attention.”